Seaborne iron ore prices have continued to surge. Expectations for the new year have continued to drive prices higher despite weaker steel prices.
The Kallanish KORE 62% Fe index jumped another $2.11/t to $137.56/dry metric tonne cfr Qingdao. The Kallanish KORE 65% Fe index gained $2.15/t to $149.19/dmt cfr, and the KORE 58% Fe index increased $1.62/t to $126.30/dmt cfr.
On the Dalian Commodity Exchange January 2021 iron ore settled up CNY 10/t at CNY 932.5/t ($142.03/t), while on the Singapore Exchange January 62% Fe futures settled up $2.52/t at $132.54/t. The same contract for 65% Fe and 58% Fe futures settled up $1.76/t at $146.38/t, and up $0.71/t at $121.02/t respectively. In Tangshan, billet prices fell CNY 10/t to CNY 3,580/t, and steel futures prices have also declined (see separate article).
In addition to falling port stocks, iron ore prices are partly being supported by optimism for demand in the second quarter of 2021. Some mills are preparing to restock this month as they prepare for high production ahead of the peak demand period after the Chinese New Year.
Although domestic steel demand and prices have come under pressure from the winter, mills are confident. Chinese steel market inventories have been declining, and with international prices finally increasing over Chinese levels, they believe they will be able to export any excess production.
